Labor and profit - Same thing?
LOML and I are in disagreement about this. She thinks labor and profit are the same thing, and I should not charge profit. On the other hand, from my research profit is separate and should be between 20-40% of materials and labor. So I charge profit. What are your thoughts? This whole business/pricing side of custom-making furniture for a living is the hardest part.
Are you running a business or...
So are you in business or are you doing a favor for a friend? There's your difference, plain and simple.
If you look at this in a cold economic point-of-view (which you must, if you are really running a business), you want to charge your customer the maximum amount that they are willing to pay for the piece, regardless of how long it takes you make it. It is the market value of the piece being sold that determines the price. Anything less and the buyer is getting a bargain, which doesn't sound like a good business strategy.
This is similar to the old saying about the difference/similarity between an employer and an employee. The employer's goal is to get the most work for the least pay from every employee. The employee's goal is to get the most pay for the least work. A balance is naturally struck where both parties wind up at the equilibrium point (unless you throw in unnatural influences, such as labor unions in this example...but your example of pricing a piece of work is a much simpler scenario than that).
Now, if you aren't really doing this as a business and just an extension of your favorite hobby, then by all means make cool stuff for friends and sell it to them for the price of the lumber and maybe a new router bit or some tool maintenance. But if this really is a business, you need to try to think about things unemotionally.